April 29, 2010
Proposed FY11 budget gets first look from regents
by Anne Krapfl
President Gregory Geoffroy has proposed that Iowa State will use $3 million to $4 million from the university's general appropriation to provide some individual salary increases for the fiscal year that begins July 1. He made his remarks as part of a preliminary budget discussion at the April 29 state Board of Regents meeting.
Geoffroy said there is funding for "a limited number" of salary increases that, as outlined in the university's salary policy, address:
- Retention of key employees
- Equity issues in the marketplace
- Particularly meritorious performance by faculty and staff
In previous budget discussions, university units were expected to fund these increases.
Geoffroy also told the board Iowa State intends to return the university's contribution to employees' TIAA-CREF accounts to 10 percent of salary on July 1. The contribution was lowered to 8 percent this winter to help meet a budget reversion to the state. And Geoffroy said the goal in FY11 is to not require furloughs for faculty and P&S staff.
Geoffroy outlined a proposed university budget that contains nearly $20.4 million less state support than the university received on July 1, 2009, and $58.7 million less than on July 1, 2008. Iowa State will rely on projected new tuition revenues ($21 million), a one-time state appropriation ($3.2 million) and increases in research indirect cost recovery and miscellaneous income ($400,000) to bring revenue levels back to approximately the July 2009 level. However, that revenue must fund a long list of increasing costs, including student financial aid ($6.4 million), employee insurance ($2.3 million) and library acquisitions ($770,000), among others.
In building the FY11 budget, university leaders made permanent a $24.9 million mid-year reduction to the FY10 budget. Geoffroy shared with the board some of the changes being implemented at the college and department levels.
Board members didn't raise any questions about the proposed FY11 budget, and commended Geoffroy for the detail in his proposal.
More retirement options
Board members approved Iowa State's proposal for a third retirement incentive option. Dubbed "RIO3," it is available to employees who are 55 years old with 10 years of service on their retirement date. It is similar to the previous two retirement incentive options (RIO and RIO2) with one other change. Employees who currently are enrolled in TIAA-CREF would have the choice of five years of health care coverage (as with the previous plans) or five years of employer-paid retirement contributions. Employees with IPERS would not be able to opt for the employer-paid retirement contributions.
Prior to voting in favor of the proposal, board president David Miles questioned the efficacy of a growing series of retirement incentive options. Vice president for business and finance Warren Madden said he thinks RIO3 will be the last program.
"We don't anticipate any additional options will be necessary," he said. "We think this will be another attractive option to staff and perhaps some faculty will participate as well."
The board also approved Iowa State's proposal for a phased retirement program.
The program offers qualified employees a reduced appointment for a maximum of two years. At the end of that time, the employee will have the option of medical coverage or employer-paid retirement contributions for the balance of five years -- like the RIO3 plan -- once phased retirement has begun.
The application deadline for this phased retirement program is April 30, 2011, and the phased retirement period must begin by Jan. 1, 2012. The employee's department must approve the request.